Credit Cards Supporting Non-Profit Organizations – Guest Post

The economic hardships of the last few years have hit non-profit organizations especially hard. Due to high unemployment rates and underemployment rates in the U.S., charitable giving has fallen sharply since 2008.

Volunteer In Your Community Inc

In an attempt to help non-profit organization reach their funding goals, several credit card companies have launched campaigns known as affinity cards, in an attempt to help service the non-profit sector.

How It Works

Typically, when you use your credit card, your credit card company is making a very small amount of money on every transaction you make. With a non-profit card program, credit card companies are passing a percentage of these profits back to non-profit agencies.

Capital One Financial Corporate is one such credit company that recently launched a non-profit credit card program. The name of the program is Card Lab Connect, and it allows non-profit organizations to access an online tool, which allows the organization to register their program, create a custom design for the credit card, and then market these affinity cards to their supporters.

Then, when supporters sign up for a credit card, the non-profit organization makes money in two ways:

1. Automatic amount when a new account is opened.2. 1 percent of net purchases.

Both of these amounts are donated directly to the non-profit. This is a great way for non-profit organizations to help drive donations to meet their funding needs. Although you want to help your organization, make sure not to spend too much money, which could lead to eventual non-profit credit card consolidation.

How Much the Organization Can Make

Non-profit credit cards are not an end-all solution for non-profit organizations. Remember, these organizations are only making 1% of net purchases on a good program, so even if card holders spent $10,000,000 per year, which is a lot of money, the organization would only bring in about $100,000. Therefore, this is simply an additional stream of revenue donations for the non-profit that can add up over time, and it can bring substantial support to struggling organizations.

The Drawback

The only drawback for the credit card holder is that the credit card company will be donating the money to the non-profit; therefore, the credit card company, not the credit card holder, will be receiving the tax write-off.

Therefore, if you are seeking to give financially both out of concern and also for tax sheltering reasons, carrying a non-profit credit card will not help alleviate your tax burden. Thus, an affinity card should be seen as another way to give back, not as a way to reduce your tax liability.

Scott Salva writes informative articles on behalf of SecureLoanConsolidation.com to help people make better financial decisions in their pursuit of a debt free life.

Posted by Mitch Mitchell on Mar 24, 2012

This post has 4 comments

I think that the idea is genial! It’s the best way to support non-porift organizations, and 1% of online purchases is a very affordable amount of money. I would use it, I’m sure.Julie recently posted…dental treatment costs

It is a fact that economy is not going well in the last few years and honestly I don’t think that situation will improve in the next few years. I think this is wide practice already and I’ve also heard that even donations done by SMS will be tax free.Carl recently posted…Is Professionalism Dead? – New Business Ideas

This is a wonderful idea. It is a great way to support non-porift organizations.
And the drawback you mention here doesn’t exactly seem to be a drawback to me. The credit-card company should have some benefit from such a wonderful offer.

I think this is a great idea, and really a win-win situation for everyone involved. The non-profit organization gets some much needed support, the consumer contributes to a better world, and the credit card companies gets the tax write-off. To me, that’s not a drawback at all, so I agree with Alan, I think it’s only fair that the credit card company benefits as well.Tom Johnsen recently posted…365 Direkte – Best i test